Truist CIO Keith Lerner believes that the bull market in stocks still has plenty of momentum left, driven by falling interest rates, tax relief, and investments in AI. At the same time, he said that investors should prepare for potential “curveballs” along the way.
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Lerner noted that the current bull market began in 2022 and “of the seven prior bull markets that extended beyond three years, all posted gains in year four.”
Bull Market Momentum Likely to Persist, Says Lerner
Furthermore, Lerner added that “the evidence suggests we are neither early in the cycle nor at the end,” pointing to strong earnings growth and historically favorable returns following interest rate reductions.
A major concern among investors is concentration risk, with the top 10 S&P 500 (SPX) companies accounting for nearly 40% of the index. Lerner acknowledges this risk, but also points out that the leaders of a bull market tend to perform well until the end of the cycle. Heading into the new year, Lerner expects broader participation from the rest of the stock market and sees potential in small-cap companies.
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